“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

Matt Yglesias’ proposal for reforming DC’s ANC’s

At the risk of turning Market Urbanism into Reblogging Matt Yglesias, here’s another interesting post from the blogosphere’s most famous market urbanist about reforming DC’s Advisory Neighborhood Commission (ANC) system. After discussing a recent decision by an ANC incumbent to deny Five Guys permission to open up a sidewalk cafe in an otherwise barren area until they pay up for “other community initiatives,” he claims that the problem isn’t necessarily shortsightedness vis-à-vis development, but rather “an error of institutional design”:

Advisory Neighborhood Commissions don’t have very much power or very much responsibility. But they do have a lot of power over liquor licenses, sidewalk cafes, and zoning variances. ANC members, however, have views on things other than liquor licenses, sidewalk cafes, and zoning variances. So the most reasonable way for them to achieve a diverse set of policy goals is to adopt a very stringent attitude toward liquor licenses and sidewalk cafes, and to support very restrictive zoning rules that increase the value of variances, and then to trade permission to do business for other kinds of favors.

If a fixed portion of retail sales taxes raised in a given ANC were put into a neighborhood fund controlled by the commissioners, then I bet commissioners would suddenly be less interested in swaps of these sorts and more interested in attracting businesses to their area. But instead we’ve set up ANCs in a way that encourages them to be systematically biased against just saying “yes” to local retailers.

Practical politics are not my forte, but this sounds like it could be a good idea. If it would work, I like the idea of essentially standardizing the community bribe and having it be paid in fungible money rather than less efficient in-kind donations (more parking, inclusionary zoning, etc.). I would suppose that the system would work best if applied extremely locally, so that merchants/residents know they will directly benefit and the money wouldn’t be spent funneled into a general fund for the entire city, like it is now. In this respect, Yglesias’ proposal might have a chance in DC, since ANC’s only cover a few small neighborhoods each.

But one fear that I have is that rather than standardizing the development contribution around the current level, it would just set the bar for contributions a bit higher, with commissioners demanding further concessions on top of the tax. (Another fear that I have is that the city wouldn’t be willing to give the ANC’s money from their share, and so the tax rate would rise overall, but if this replaces the de facto taxes that ANC’s currently levy, it could be worth it.) I realize that Matt Yglesias’ argument is that they would be less likely to ask for more since they’d have a fiscal stake in the project already, but it’s possible that government officials wouldn’t act so rationally, and that they are perhaps more motivated by an overaching anti-development attitude rather than by extra revenue. And even if they are in it for the money, they might simply just not realize what side of the Laffer curve they’re on.

I should note that Yglesias’ proposal sounds similar to Donald Shoup’s idea (or did it start before him?) of on-street parking revenue being put towards a “parking benefit districts” – essentially bribing merchants and residents into allowing meter rates to rise towards a market rate by giving them the extra money collected. I know that Shoup’s ideas have been catching on, but that’s not necessarily because of the local reinvestment of the meter revenues, and I don’t even know how prevalent parking benefit districts are (commenters?).

So what do you guys think – would giving money to ANC’s make them more development- and density-friendly?

Share this:

About Stephen Smith

I graduated Spring 2010 from Georgetown undergrad, with an entirely unrelated and highly regrettable major that might have made a little more sense if I actually wanted to become an international trade lawyer, but which alas seems good for little else.

Comments

Of course you could also just abolish this level of government. But I was trying to be constructive and small-bore in my proposal.

Another way of looking at it is this. Since city revenue, under my proposal, be redirected to ANCs you’d end up with a situation where more business-friendly ANCs have higher-quality public infrastructure and therefore higher home values and such. This should shift the calculus not only of commissioners but also of incumbent residents. The current set up doesn’t allow people to internalize enough of the broad benefits of pro-development views.

I think part of the key would be to make sure the fund is tightly defined. Part of the problem with ANCs is that they sprawl beyond their authority and overreach on any number of subjects because their authority isn’t well defined. A little focus would be a good thing. You’d want to spell out exactly what these funds could be used for and what they could not.

How formalized are the elections for these organizations? In Philadelphia we have powerful Neighborhood Advisory Committees, but some are filled with political cronies and don’t hold elections to replace members. If you are going to direct tax money to these groups, they need to be run the same as city government.

Or as Mr. Yglesias commented, just abolish this level of government completely. Isn’t the whole point of having city government that things will be run more efficiently? Otherwise, DC should just devolve into several hundred small towns.

How formalized are the elections for these organizations? In Philadelphia we have powerful Neighborhood Advisory Committees, but some are filled with political cronies and don’t hold elections to replace members. If you are going to direct tax money to these groups, they need to be run the same as city government.

Or as Mr. Yglesias commented, just abolish this level of government completely. Isn’t the whole point of having city government that things will be run more efficiently? Otherwise, DC should just devolve into several hundred small towns.